The Canadian market is highly inclusive and more suitable for verifying the authenticity of demand.

Hai Chuangpai HiTrends Report (by Ray)

Can life service platforms in Canada use word of mouth to open up the market?

The two founders of Lit Life, Eric Yuan and Richard Liu

Although the number of overseas Chinese in Canada has increased year by year, the services related to daily life have not improved significantly in terms of quality and efficiency, especially in the home service.

On the one hand, the new Chinese are still unfamiliar with the Canadian way of life, and the access to information is very limited. It is difficult to find affordable and efficient services through active search.

On the other hand, the living habits of the Chinese community are not exactly the same as those of the Canadian natives, and the domestic service in China has developed quite maturely. It is common for domestic consumers to solve problems when they come to the door. The home service is expensive and has its own unique standards. It is difficult to meet the expectations of the Chinese community and it is difficult to gain the trust of the Chinese community.

Founded in May of this year, the Ritter Life team in the north of Toronto decided to change the current state of the market through innovation in technology and business models. After rigorous market research and analysis, Richard Liu, CFO and co-founder of Lite Life, believes that the Chinese community in Canada not only has an increasing demand for services, but also has huge potential for consumption upgrades. The reason behind this is that a considerable part of the Canadians have become accustomed to the domestic service model, and the willingness and ability to consume are strong. Second, because of the limitations of knowledge in time and domestic work, things must be higher. Opportunity costs, which also means a greater natural demand for services.

Official statistics show that there are more than 2 million Chinese in Canada, including 650,000 new immigrants and 150,000 international students. The annual increase of Chinese immigrants is about 30,000, and the number of international students is about 10,000. Although the Chinese in Canada are far from being able to compare with China, they are rarely optimistic, but the purchasing power of this market segment is very strong. The average annual expenditure per household in Ontario alone is as high as 75,000 Canadian dollars, equal to 380,000 yuan, and the annual total consumption of overseas students is more than 7 billion Canadian dollars, equivalent to 35 billion yuan.

Eric Yuan, CEO and co-founder of Lite Life, revealed that both international students and new immigrants came to Canada afterThere is less need to move once, and the housekeeping cleaning service brought by the move can basically be characterized as just needed. Since the beginning of the university, Eric has been accumulating work experience in different offline consumption scenarios, and has been participating in large-scale activities organized by student organizations. Eric found that although the labor costs in Canada are expensive, the price per unit of the service industry is generally high, and there is still enough profit margin. Even if isolated, most of Canada’s local domestic companies can survive, as long as the cost can be effectively controlled, the feasibility of home service is actually very high.

This market is still very primitive

I graduated from the University of Toronto with a degree in financial management and holds a CFA certificate. Richard is currently pursuing an MBA at the Rotman School of Business at the University of Toronto. He has also been doing personal finance business for market research, financial analysis, and general Family income and consumption are very familiar. He believes that the current level of service received by Chinese in Canada is generally low in the field of home service. They can afford it and deserve better service.

“If you want to use two words to describe Canada’s home service market, it is original.” Richard told HiTrends that the local service industry in Canada, except for the mode of the housekeeping company, mostly Self-employed. In the self-employed service staff group, people of different cultural backgrounds rarely directly reach transactions, and even between people of the same cultural background, the service experience rarely communicates. Such an environment has created a market that has not been reclaimed, chaotic and disorderly, and has problems such as price opacity, communication and trial and error costs.

First of all, in terms of pricing methods, most self-employed self-employed people look at their moods and pat their heads, and there is no fixed standard at all. Although the services of the housekeeping company are relatively more secure, most of the local service providers have smaller service radius and only serve customers in the fixed area, and the pricing or pricing standards are not open. With the same service, the pricing difference between different merchants can be more than doubled.

In addition, limited access to information, overseas Chinese, in addition to making choices among hundreds of similarly paid advertisements, can only rely on word of mouth to find services, and often ask many people. Can you ask a contact person for a service person. In this case, the customer can judge the standard of the service provider, and basically can only ask whether the recommended friend himself or not has used it. Therefore, the cost of customer trial and error is also very high, even if dissatisfied with the quality of service can only be silently endured.

Richard believes that the home service is essentially a word-of-mouth business, which is no different for self-employed and domestic companies. For both, taking orders is like waiting for the rabbit, and can only increase the exposure through posting on the social networking site and posting on the life information platform. But because the spread of social media is limited to known friendsIn the relationship, there are countless posts on the life information platform. More than a dozen pages or more, the actual publicity effect can be minimal, and the accumulation of word-of-mouth cannot bring practical help. Therefore, service personnel also need a platform that can accumulate word of mouth and be able to display personal word of mouth.

It is precisely to solve the problem of information asymmetry and reduce the communication and trial and error costs of users. Eric and Richard believe that there is a high probability that a life service platform that connects the two sides of supply and demand and can display the reputation of service personnel will be able to Making the chaotic market more transparent and regulated is a worthwhile solution.

Litte Life Solutions

After the trade-off, although the development cost of the APP is relatively high, Eric and Richard decided that the APP can better realize the vision of the service team and the user’s stickiness to the mobile device itself. Use APP as the operating entity of the platform.

Richard believes that people’s habit of using smartphones has become an irreversible trend, and hope that a device can solve all needs. In addition, since the APP on the mobile phone can be connected more conveniently, and the APP is the main solution, any grafting in the future will be relatively simple.

At present, there are a total of six services that have been launched and opened, including cleaning, dry cleaning, car washing, moving, repairing, and shoveling snow. The platform mainly uses two service modes, namely, a relatively high-frequency word-of-mouth appointment, and an emergency-only immediate order.

The mode of word-of-mouth booking is that Eric and Richard believe that they have the highest match with the actual market demand. The customer can automatically match the ordering merchants by selecting the service type and time on the APP, and will allow the customer to choose to sort by comprehensive rating or volume. Thanks to the module of customer ratings and comments, customers have more reference and can better judge the quality of service. At the same time, all merchants who have settled in the LITE Life App must openly and freely bid, which will form a constraint on the pricing of the service, and avoid the practice of sitting on the ground. The higher-rated merchants also have a certain premium ability.

As for the immediate order, Eric believes that its intrinsic value and necessity are more likely to manifest in extreme weather such as snowstorms and ice rain. Customers can submit urgent orders on the app, match them according to location, send them to all merchants in the area, and assign orders to the fastest order merchants.

Because Eric himself had been troubled by power outages during the snowy nights in Canada, he could only go through WeChat for help in the absence of a concept for repairing the circuit. Although this service does not correspond to high-frequency demand, it is considered that a large number of independent and semi-detached houses in the Toronto area have been built for more than 20 years, and in the face of extreme conditions, customer demand is forced.Cut, the choice is very limited, so the Lit Life team unanimously believes that this is a very important function of the Lite Life app.

Richard specifically mentioned in the interview that in order to protect the rights of customers and merchants at the same time, and to reasonably share the risk of poor credit or service quality, Lite Life has set up a mechanism for prepaid deposits. According to the investigation by the Lit Life team, for the merchants, the problems caused by customer jump orders and cash settlement are the most troublesome in the original self-employed market. When the customer orders through the Lite Life APP, the customer must pay the deposit immediately upon the appointment. Once the merchant has made the appointment and the customer does not appear at the agreed time, the platform will automatically transfer a large part of the deposit to the merchant as compensation. Moreover, since all services must be settled through the APP and the bound credit card, the amount will be automatically deducted after the customer confirms the service, preventing the parties from having a dispute over the price.

Similarly, for the customer, the risk of a merchant with poor service quality and unable to solve the problem is objectively not easy to eliminate. By providing background checks, checking the valid documents and address information of the merchants, and confirming that the merchants hold the qualification documents for legal work in Canada, Lite Life provides basic security and initially reduces the risks of customers. In order to further ensure the quality of service, when the first merchant fails to solve the problem faced by the customer, the platform will retain the payment, and then the order will be put back into the task pool of the immediate order, matching the new merchant until the merchants who receive the order completely solve the problem. problem.

In Richard’s view, the core value of Lite’s Life App is to break down information barriers through Internet technology and create a more orderly market. The value of this APP as a platform is not only to connect the supply and demand relationship, but also to meet the needs of users while reducing the cost of users, and also to protect the legitimate interests of self-employed businesses. At the same time, merchants can also bid farewell to the way of working with cash settlement services and have legal income, which is equivalent to creating employment. This also means that merchants can use the cost of providing services for tax rebates, and they also have the opportunity to meet the conditions for applying for a home loan. They will also receive more pensions due to legal taxation after retirement. Led Life has received written support from representatives of Chinese councillors in the local Chinese community because of its ability to serve the community better and create jobs.

Life service platform will be available in the future

Because the initial positioning of the APP is the platform, not the service provider, this in itself is a cost-saving option that increases the sustainability of the entire project and business model. Being a life service platform is not a project that can break even in a short period of time. At this point, Eric and Richard have long agreed. According to Richard, in addition to the inevitable costs such as development and legal affairs, the cost and budget control is very strict.

Fortunately, in the marketIn the process of checking and contacting various channels, Eric found that the cohesiveness of overseas Chinese often exceeds the imagination of the Lit life team. Many times, the Chinese community living in the same area will spontaneously form a WeChat group, spontaneously organize offline activities, and are very familiar with each other. In this highly active community, the efficiency of information and word-of-mouth communication can be very high, or it will significantly reduce the cost of getting customers to the Lit life team.

Of course, in order to better educate users and better win the trust of people, it is necessary to make the interface of the APP as simple as possible, to polish various functions and services, and also to invest a lot of time. However, compared with the model of full-time employment of service personnel in the home economics company, the word-of-mouth platform that simply connects the supply and demand has actually saved a lot of financial, time and management costs. There are also local life platforms such as Jiffy and Task Rabbit in Canada, but there are no apps that are mainly Chinese.

“Everyone’s needs are different, but the sporadic needs of each individual are not small.” Richard believes that the future direction of Lite’s life, in addition to expanding between different regions and cultures, To enrich the types of services available on the app. At present, the domestic service and dry cleaning service are the two services with the highest frequency of user consumption, and will become an important time window. With the gradual opening of the services, Lite Life App will have the opportunity to become an indispensable tool in the life of overseas Chinese, and become the primary means of finding solutions when encountering problems in overseas Chinese life, and even become a way of life.

When the opponents who choose the same business model are ready to enter the market, Lite Life has established a cooperative relationship with most of the merchants, and already has a relatively good cash flow, the first advantage has been established. Unless the opponent’s capital is very abundant, it can make continuous subsidies for both ends of the supply and demand, otherwise it is very difficult to catch up. However, in the volume and valuation of the market, the practice of continuous subsidies is difficult to return. Moreover, Eric and Richard believe that the mobile Internet industry has developed to this day, and as the tide of capital has brought many lessons from the past, the practice of barbaric subsidies should not continue to be popular.

Richard, who is now pursuing an MBA program, feels that although the Canadian market is small, it is highly inclusive and more suitable for verifying the authenticity of demand, allowing entrepreneurs to think deeply. Although Richard knows that the products and services of Lite’s life still need to be continuously improved and optimized in the later stage, there is still enough growth and trial and error space in the market, so the potential of the life service platform to explore in the future is still great.

Can the service platform in Canada use word of mouth to open up the market?

Can the service platform in Canada use word of mouth to open up the market?